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Climate Change Committee calls for extension of green energy funding

30 June 2015

The government must urgently extend its low carbon support schemes into the next decade to avoid 'stop-start' green energy investments, the UK Parliament's influential Committee on Climate Change (CCC) said on June 30. In its latest progress report to Parliament the CCC notes UK emissions fell 8% last year, thanks to clean tech investments and assistance from a mild winter.

But it adds there is a 15% gap between projected future emissions for the period from 2023 to 2027 and the targets the government has to meet, given that by the mid-2020s the UK is committed to reducing emissions by 50% on 1990 levels under the Climate Change Act.

It recommends a series of measures to get the UK's emissions reduction back on course, warning decisions made in this Parliament will "largely determine" the level of progress made through to 2030 and beyond.

The recommendations to Ministers include a call for them to provide certainty for investors by continuing funding for low carbon electricity through the Levy Control Framework to at least 2025. Currently, the LCF is set to hit £7.6bn by 2020/21, but the CCC says this will need to peak at around £9bn by 2025 to bring forward more costly clean energy technologies such as offshore wind and carbon capture and storage, before declining throughout the rest of the decade.

The CCC argues an announcement on the future of the LCF budget, which some energy industry insiders fear is on the brink of running out, will need to come before its next progress report in June 2016 to ensure investors have sufficient information to make decisions today on projects that will come online in the 2020s.

"The government has put into place a series of programmes that properly meet its requirements [at this point under the Climate Change Act]," said Lord Deben, chair of the CCC. "But it has very urgently to move those forward if it's going to be in that same place in two or three years' time - certainly in five years' time. It has to do it immediately because of the long lead times."

Without sufficiently speedy decisions, the UK could lose out on clean tech investment to overseas competitors, Deben added.

The Department of Energy and Climate Change (DECC) is set to publish a full response to the CCC report in October. In the meantime, a Department spokeswoman said the LCF is under constant review and the government would be setting out plans to deliver a generation of new, cost effective and secure electricity supplies in due course.